Over the last few days, the currencies of Argentina, Brazil and Turkey have been hit by a series of shocks.

Now, the gloomy mood is starting to infect currency markets in many other major developing economies - especially in Latin America, Eastern Europe and Asia.

There have been fears that a widespread sell-off in emerging currencies could spark a broader financial crisis, as happened in 1997-98, when a Russian devaluation followed hard on the heels of the Asian economic collapse.

But some economists point out that emerging markets, hardened by the buffeting of the 1990s, are now robust enough to be able to shrug off a speculative attack.

Latin losers

The epicentre of the current tremors is Argentina, where investors have started to question the government's commitment to maintaining the currency's peg against the US dollar.

Latin American currencies have been the most panicky

Argentine economic minister Domingo Cavallo tinkered with the peso-dollar peg at the end of June, prompting fears that he was about to allow a devaluation.

And in an interview published on Monday with the French newspaper La Tribune, Mr Cavallo attempted to combat fears that he intended to liberalise the exchange rate still further.

Nervousness about Argentine monetary policy, at a time of economic slowdown in some Latin American countries, has provoked a sell-off throughout the region.

The Brazilian central bank announced last Friday that it would be spending $6bn in order to boost its currency, the real.

The real has hit a series of record lows against the dollar during the first week of July, and has now lost one-fifth of its value since the beginning of 2001.

The Chilean central bank has also announced intervention in the currency markets.

Turkey roasted

The other main focus of currency panic is Turkey, where the lira has dropped to an all-time low.

The fall followed a decision by the International Monetary Fund (IMF) to delay payment of $1.6bn in economic assistance, part of a package aimed at rescuing Turkey from a financial crisis that hit at the beginning of this year.

Although some hoped that the IMF would change its mind quickly, the Turkish government has proved unwilling to come to terms with the fund, offering the markets little hope of a cash injection in the near future.

The lira fell by 4% on Friday alone, and on Monday stood at about 1.3m lira to the dollar.

Panic hits Eastern Europe...

The fear now is "contagion" - the notion that panic might spread to markets where there is no immediate crisis.

Already, emerging-market nerves are having an impact on Eastern Europe.

The beleaguered rouble has fallen again

The Russian rouble, whose August 1998 devaluation was the trigger for the last round of currency panic, fell to an all-time low against the dollar on Monday.

The Russian central bank has declined to intervene, feeling that a modest devaluation might help the country's minerals exporters.

The Polish zloty, already shaken by investor fears over the government's budget policy, dropped to seven-month lows against the dollar on Monday, after having lost 4% of its value last Friday.

Even regions whose economies have little direct connection with either Latin America or Turkey have not been immune.

Jitters have been felt as far away as the Philippines

In Asia, the Singapore dollar plumbed 11-year lows on Friday, only buoyed on Monday by hopes of central bank intervention.

The Thai baht, the Korean won and the Philippine peso have all suffered too in the last week.

And the South African rand, under pressure over fears of a Zimbabwean-style land crisis, slipped to a new record low against the US dollar on Monday.

Contagion, or coincidence?

What is not certain is whether this constitutes "contagion" in the 1998 sense, or merely coincidence.

Currencies in Russia, Poland, Singapore and South Africa have their own reasons for weakness, quite independent from what is going on in Latin America and Turkey.

"Poland, for example, has been ripe for a double-digit correction for some time now," said John Davitte, head of emerging-market research at IDEAglobal in London.

There also seems to be less chance of bad news spreading from one country to another, since many governments modified their policy regime in the aftermath of the 1997-98 crisis, precisely with the aim of avoiding contagion a second time.

And even if speculators were to attack all emerging-market currencies at the same time, it may not have such a devastating effect as in previous crises.

Most emerging economies are far less dependent on flows of short-term investment than they were in the 1990s.